When I first approached Luis, one of my clients, to introduce him about our services he was really skeptical about a foreigner running a sourcing and procurement firm in China. He had been a few years back to China in search of matches to sell to Latin America, a trip that took him mostly to the southern regions of the Middle Kingdom. His contact during that time, was a Chinese trader that took him to see the factories and evaluate them. This business venture didn't succeed basically because the prices were not competitive, specially if you compared them to factories in India where he later visited (without a need of a "guide").
His other business venture in China was the sourcing of industrial safety boots, something that he had already been doing for almost 2 years but was not satisfied with the quality and the price.
His first question to us was: being a foreigner, how can you get a competitive price for our products? For one thing, I said, I can speak Chinese, but most important, I can use this skill to talk to many suppliers in any given region to get an X amount of quotations. This will first give me a sense of the market, a feel for the price. I continued, we would still have to evaluate each factory, make an initial assessment and due diligence to then start getting samples for evaluation. But I think what you will value most is that I understand the quality and price you are looking, I understand our market.
He wasn't convinced yet and we had to wait for the right opportunity to showcase our skills. A few months later his supplier of boots (which was a trader) decided to hike up the prices by 30%, making it unfeasible to buy from them. When Luis called me around 2:00 a.m. he was angry and said: I need to find a reliable factory, I need to have in the next 2 months 3 containers of industrial safety boots here. Let's see if you are more than talk.
I explained to Luis that we don't mark up prices. What prices we get we give to our clients. Our commission is fixed, so the clients know exactly what the factory cost is.
Now the problem with the Latin American market is that they are price sensitive (now-a-days who isn't?), but how can you be price sensitive when you are talking about safety equipment? Luis sent me specifications of the product he was looking for and I talked with him for maybe an hour trying to understand what made this product expensive. We needed to move fast so to shorten the huge list of suppliers that we had, we narrow it to factories that had CE or ANSI certifications that were up to date and compare their prices. My team got each of the factories business license and checked that they had no problems with the law. From the list we chose 3 companies with really good experience, history and clients and ask for samples of their products. When the samples arrived to Luis' office, Day 15th of the project, we had found a supplier that fit his needs. The product from this supplier was 3USD cheaper than his previous one and had both CE and ANSI certification, making it easier to sell the product to Latin American companies.
But we were lucky.... to get an opportunity to showcase our skills.
His other business venture in China was the sourcing of industrial safety boots, something that he had already been doing for almost 2 years but was not satisfied with the quality and the price.
His first question to us was: being a foreigner, how can you get a competitive price for our products? For one thing, I said, I can speak Chinese, but most important, I can use this skill to talk to many suppliers in any given region to get an X amount of quotations. This will first give me a sense of the market, a feel for the price. I continued, we would still have to evaluate each factory, make an initial assessment and due diligence to then start getting samples for evaluation. But I think what you will value most is that I understand the quality and price you are looking, I understand our market.
He wasn't convinced yet and we had to wait for the right opportunity to showcase our skills. A few months later his supplier of boots (which was a trader) decided to hike up the prices by 30%, making it unfeasible to buy from them. When Luis called me around 2:00 a.m. he was angry and said: I need to find a reliable factory, I need to have in the next 2 months 3 containers of industrial safety boots here. Let's see if you are more than talk.
I explained to Luis that we don't mark up prices. What prices we get we give to our clients. Our commission is fixed, so the clients know exactly what the factory cost is.
Now the problem with the Latin American market is that they are price sensitive (now-a-days who isn't?), but how can you be price sensitive when you are talking about safety equipment? Luis sent me specifications of the product he was looking for and I talked with him for maybe an hour trying to understand what made this product expensive. We needed to move fast so to shorten the huge list of suppliers that we had, we narrow it to factories that had CE or ANSI certifications that were up to date and compare their prices. My team got each of the factories business license and checked that they had no problems with the law. From the list we chose 3 companies with really good experience, history and clients and ask for samples of their products. When the samples arrived to Luis' office, Day 15th of the project, we had found a supplier that fit his needs. The product from this supplier was 3USD cheaper than his previous one and had both CE and ANSI certification, making it easier to sell the product to Latin American companies.
But we were lucky.... to get an opportunity to showcase our skills.
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